The sweet spots for investors are where AI and ageing trends intersect

Research on demographics mostly looks at the perils of a shrinking labour force on economic growth but ignores what automation and artificial intelligence does for productivity. Likewise, research on automation and AI focuses on jobs that may be lost, but overlooks the demographic issues they may solve. Put the two together – ageing populations with automation/AI – and there are clusters of investment opportunity.

We all know that advanced economies face a rise in dependency ratios – the number of retirees to workers. By 2080, China is expected to have more people over 65 than aged 15 to 65. Happily, as these demographic pressures increase, automation technology and AI are beginning to reshape productivity.

Yet, investors need to note that the process will not happen everywhere, or in every sector. Three factors need to align. A sector or industry must benefit from ageing populations. It needs to be one where AI and robotics can drive productivity. And it must be in a territory with the digital and physical capacity to scale technology.